Groups of civilian vigilantes had been demanding federal authorities arrest him as a condition for laying down their own arms.

Federal forces have moved into Michoacan, in western Mexico, in recent weeks to disarm vigilantes and flush out the Knights Templar gang, which controls large areas of the state.

Self-defense groups of farmers and other local people first took up arms in February 2013 to oust the cartel, claiming local police were either colluding with the gang or unable to stop its violence, kidnapping and extortion rackets.

Poverty-stricken Michoacan has become the most pressing security issue facing Mexico's President Enrique Pena Nieto.

He inherited a bloody war on drugs from his predecessor in 2012 that has left more than 77,000 people dead since 2006.

Mexican soldiers patrol the streets of Apatzingan, in Michoacan State, Mexico, on January 16, 2014

Alfredo Estrella, AFP/File

The government, which earlier had asked vigilantes all to lay down their arms in Michoacan, changed its tack on Monday. It now has decided some self-defense units would be brought under the government umbrella as "Rural Defense Units," the Interior Ministry said.

The government desperately needs the support of the vigilantes and does not want to be in the position of having to disarm those who it sees as essentially fighting a common enemy.

But the situation puts an embarrassing spotlight on how huge areas, in real life, are not effectively policed or protected by either local police, state police, federal police or federal troops.